Oaxaca Residents Block US-Backed Hydroelectric Plant Near Vital Community Waterways The Associated Press
go to original January 31, 2015

A fisherman works in the waters of the "Cerro the Oro" dam in the town of Tuxtepec, Mexico. (AP/Felix Marquez)

People in the hamlet of Santa Ursula began to worry when the logging started. In a few short weeks, more than a mile of densely forested riverbank was stripped from the Arroyo Sal to make way for heavy dredging equipment.

Work was just beginning in late 2010 on an ambitious, three-year, $30 million project to build a 15-megawatt hydroelectric plant directly adjacent to the Cerro de Oro dam, with support from a U.S. government agency in Washington.

Next came dynamite explosions as crews blasted through rock to create a tunnel designed to feed power-generating turbines. In Santa Ursula, some 1.5 miles away, the ground shook and cracks formed in homes, some residents say. Finally, murky gray water began flowing from the taps, leading locals to fear the worst: contamination in the gurgling mountain spring that provides drinking water for nearly 2,000 people and feeds the arroyo.

"For us, the arroyo is life," said Federico Cohetero, a farmer in Santa Ursula, a hamlet in Oaxaca state six hours southeast of Mexico City.

The project was financially supported by the Overseas Private Investment Corp, a U.S. government agency with a low profile but global mission. OPIC provided an $8.5 million loan guarantee for the hydropower retrofit in Mexico, part of its $60 million commitment to an investment fund focused on Latin American power projects.

On the ground in Mexico, the blasts and water worries triggered protests that put the project on hold. By late 2011, the protests resulted in a rare instance of a community fighting off development in a country where projects are often pushed through over local objections.

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